A report on healthcare spending released in September by actuaries at the Centers for Medicare and Medicaid Services has been used to support both sides of the bitter partisan debate over healthcare reform.
The report projected U.S. healthcare spending to reach nearly $4.6 trillion by 2019, growing at an average annual rate of 6.3 percent over the next decade, according to economists at CMS.
By 2019, healthcare is projected to account for nearly one of every five U.S. dollars spent, or about 19.6 percent of the gross domestic product, 0.3 percentage points higher than anticipated before healthcare reform, according to the study.
To Republicans in Congress, this is simply additional "verification" that the Affordable Care Act was a bad idea that will increase healthcare costs over time.
In contrast, Democrats painted the report as a sign of success. White House Director of Health Reform Nancy Ann DeParle said the report confirms that the ACA will make healthcare more affordable for Americans.
"In fact, the Actuary's report indicates that total healthcare spending per insured American will be more than $1000 lower thanks to the provisions of the new law than it would have been if Congress and the President had not acted," DeParle wrote in a Sept. 10 entry on the White House blog.
According to Andrea Sisko, lead author of the study and an economist at CMS, the Affordable Care Act will have "a moderate effect" on healthcare spending growth rates and the healthcare share of the economy.
""But when you peel back the onion and you start looking underneath the surface, you start to see a much more pronounced impact on payers," Sisko said.
The report estimates that spending in 2010 is projected to reach $2.6 trillion and account for 17.5 percent of the GDP, up 0.2 percent from pre-reform estimates. The growth is driven in large part by the postponement of cuts to Medicare physician payments and legislative changes to COBRA premium subsidies, study authors said.
In 2011, public and private health spending is expected to grow more slowly as reductions in Medicare physician payment rates – including a 23-percent reduction in December of 2010 – come into effect and COBRA premium subsidies expire, according to the report.
Health spending is projected to rise significantly in 2014, when health coverage is expanded to millions of uninsured Americans. Expanded coverage means overall spending is expected to increase by 9.2 percent, significantly higher than the 6.6 percent rate put forward in February, CMS researchers concluded.
Public spending is projected to increase by 9.7 percent in 2014, while private spending is anticipated to increase by 8.6 percent and the cost of the federal government's administrative function for healthcare reform is projected to cost $2.4 billion between 2010 through 2019.
"When thinking about these numbers, it's important to remember the cost of doing nothing on healthcare," wrote Meredith Hughes, Program Associate for the Health Policy Program at the New America Foundation, in a Sept. 9 blog entry. "Without reform, costs will continue to rise for everyone, coverage would erode, and care quality would remain inconsistent…We know any spending increase sounds like a bad thing -- but it's better than significantly more spending with no coverage expansion."
Hughes said if reform can be implemented successfully, it might not cost less than what the United States spends now, but will be better than the "unreformed alternative."